The Three Billion Enterprise Crowdsourcing and the Growing
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The three billion Enterprise crowdsourcing and the growing fragmentation of work To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Contents Foreword 1 Introduction 2 What is crowdsourcing? 4 Using the crowd in business 9 From closed to open 13 Endnotes 14 Contacts 16 Acknowledgements The authors would like to acknowledge the support they have received from a number of people in Deloitte while researching this publication, including Greg Howard, Renee Hunt and Ankur Borthakur. We would also like to thank Marcus Shingles and Jonathan Trichel from Deloitte Consulting LLP for their formative thinking. In this publication, references to Deloitte are references to Deloitte LLP, the UK member firm of DTTL. To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Foreword Today’s innovation problems are tough to solve. The traditional methods that have served your enterprise well for decades no longer seem to work, and your current crop of young, talented millennials don’t want to stick around to help. Exponentially advancing technology, a rapidly growing online worker population and improved access to education all add up to a confusing medley of options. You know that the best solution is out there somewhere but in an increasingly volatile, uncertain, complex and ambiguous world, it’s not always obvious what combination of people, skills and technology you need. Thankfully, this dynamic environment is an enabler and not an inhibitor of an emerging, solution-finding method called crowdsourcing – the umbrella term for a variety of approaches that harness the time, expertise and resources of large crowds of online people. Crowdsourcing offers a way for enterprises to find new solutions and to offer otherwise frustrated and nomadic employees a greater diversity of work. It’s also creating new opportunities for individuals to change the way they work, learn new skills and earn rewards wherever they are, even in remote corners of the planet. Once seen as the preserve of obscure state-sponsored competitions or corporate innovation projects, crowdsourcing is now considered mainstream, increasingly embedded in the core business activities of small and large enterprises alike. Vimi Grewal-Carr In 2014, Gartner predicted that 75 per cent of high-performing enterprises will use crowdsourcing in some form by 2018. Today, the online crowd is helping enterprises tackle a wide range of challenges, from menial tasks to more complex needs requiring specialised skills. It’s having spectacular results, too, in certain situations creating better and more scalable solutions at lower cost than even the best in-house teams. Should you be thinking about crowdsourcing? Is it only for start-ups and small businesses or can it be used at enterprise scale? Can crowdsourcing be useful for more than just a technology solution? What are the ‘killer apps’ and how do they work? How do you manage the crowd to create value? And what are the cultural and commercial challenges you will face? In the following pages, we take a close look at crowdsourcing and tackle these questions. In our view, crowdsourcing is part of an ecosystem of rapidly maturing technologies and methods that look set to play a Carl Bates fundamental role in the future of commerce and society. This paper – the latest in our series of reports under the title of ‘Disrupt: Deliver’ – aims to help business and public sector leaders understand the new and emerging opportunities for organisations in all sectors to create and deliver compelling services for their customers using the power of disruptive innovation. We hope that you find this paper useful and we look forward to your feedback. Vimi Grewal-Carr Carl Bates Managing Partner for Innovation Partner, Lead for Crowdsourcing Deloitte LLP Deloitte LLP The three billion Enterprise crowdsourcing and the growing fragmentation of work 1 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Introduction “ To answer the most vexing innovation and research questions, crowds are becoming the partner of choice.” Kevin Boudreau, Karim Lakhani 1 Throughout history, crowds have been invited to tackle Businesses also have a rich history of trying to tap into tough literary, scientific and technological challenges that crowds, using consumer surveys, focus groups, and have stumped even the most brilliant minds. experiential marketing to provoke customer engagement. Product R&D, in particular, has seen significant activity, In 1567, King Philip II of Spain offered a reward to with open innovation campaigns launched by many large anyone who could devise a simple and practical method companies, including 3M, BMW, General Mills, and Stanley for precisely determining a ship’s longitude at sea.2 The Black & Decker.9 reward was never claimed. Almost 150 years later, in 1714, the British government established the ‘Longitude rewards’ After conversations about how today’s businesses through an Act of Parliament, after scientists, including were beginning to use the internet to outsource Giovanni Domenico Cassini, Christiaan Huygens, Edmond work to individuals, Jeff Howe and Mark Robinson, Halley, and Isaac Newton, had all tried and failed to come editors at Wired Magazine, were first to coin the term up with an answer.3 The top prize of £20,000, worth “crowdsourcing” in 2005.10 In conceptualising the term over £2.5 million today, provided a significant incentive to the following year, Howe suggested that “crowdsourcing prospective entrants. represents the act of a company or institution taking a function once performed by employees and outsourcing Ultimately, the Board of Longitude awarded a number of it to an undefined (and generally large) network of people prizes for the development of various instruments, atlases in the form of an open call. This can take the form of peer- and star charts. However, it was John Harrison, production (when the job is performed collaboratively), a clockmaker from Lincolnshire, who received the largest but is also often undertaken by sole individuals.”11 The amount of prize money overall – over £23,000.4 What is, term ‘crowdsourcing’ is often used interchangeably with perhaps, most astonishing about Harrison’s 300-year-old ‘open innovation’. sea clock design is that a test of a working version in 2015 demonstrated that it is “the most accurate mechanical Right now, crowdsourcing competitions like the $30 clock with a pendulum swinging in free air”, keeping to million Google Lunar XPRIZE, the $25 million Michelson within a second of real time over a 100-day test, according Prize or the £10 million 2014 Longitude Prize are to Guinness World Records.5 challenging – and incentivising – professional scientists, engineers, entrepreneurs and innovators from all over the The crowd was not just useful for technological planet, amateur and professional alike, to develop novel breakthroughs. In 1879, when Sir James Murray was solutions to the world’s ‘wicked’ problems.12, 13, 14 In more responsible for editing the first edition of the Oxford straightforward applications of crowdsourcing, platform English Dictionary (OED), he put out a call for volunteers to providers like Lionbridge and Samasource are helping identify all of the words in the English language together enterprises with language translation, data validation, with quotations illustrating their use.6 During the next 70 image tagging and other routine tasks that require flexible years, the OED received over six million submissions from access to large numbers of people with basic computer tens of thousands of contributors. Murray’s initiative has skills.15, 16 Wikistrat, OnFrontiers and 10EQS tap into the been compared to the modern-day Wikipedia in terms of specialist expertise of hundreds of thousands of people the scale of its ambition to gather and curate knowledge.7 worldwide to provide flexible, non-routine services such Wikipedia, itself, has grown from 15,000 articles at the as consultancy, market intelligence, strategy development end of its first year, in 2001, to over five million English and research.17, 18, 19 articles today, which have been edited over 800 million times by a crowd of nearly 28 million registered users.8 2 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Despite a growing number of success stories, though, And if it’s not the aggregate ‘wisdom of the crowd’ being relatively few businesses draw on the crowd in a systematic sought but simply the best person to fulfil a specific way. Pushing problems out to a vast group of strangers task, then companies like Gigwalk, Upwork, 99Designs, seems at odds with conventional corporate wisdom. Streetbees, DesignCrowd and Writology help businesses Managers, who have traditionally looked inward for connect with and manage talented experts right across solutions, are understandably wary. How, for example, can the world.28, 29, 30, 31, 32, 33 you protect intellectual property if it is exposed so publically? How can you manage the crowd to ensure it delivers? How For individual workers, the crowd creates opportunities for can you integrate a crowdsourced solution into existing a different kind of employment, greater freedom of choice corporate processes and systems? What about the costs? and sometimes bigger rewards, too. The idea of open And how can you be sure you’ll even get a good solution? source talent via crowdsourcing is itself growing in scale, sophistication and importance as an alternative staffing Today’s workers are also frustrated with the directions model.34 According to influential innovation academics their careers are taking. They want to work on a greater Kevin Boudreau and Karim Lakhani, “Crowds are energised diversity of projects, and concentrate their time on those by intrinsic motivations, such as the desire to learn or activities that drive both reward and social worth.